In our experience of working with MLM companies on their compensations plans over the last many years, we have often met many with the misconception that there is a magical all-in-one compensation plan that will work for any company. This is not true! There are quite a few reasons behind that. We will be talking about them in detail in some of our next major posts, including the product, the build strategy, and the community and the culture.

Let’s start with the product you plan to offer. To be able to come up with an ideal compensation plan around a product, you must know the key strengths of your product, which would include:

  • The number of products your prospective client would buy;
  • The demographic base of your potential client;
  • The know-how needed to prepare, manufacture, and distribute the product;
  • And finally, the amount of time your distributor will have to put in to close a deal.

Looking at these major points, your compensation plan should be designed as such that it adequately supports the movement or sale of your product at all times. An example would be, your compensation for your distributor would be very different for a product that needs a round of meetings, get-togethers to sell as compared to a product that the end customer can easily purchase within minutes of deciding on it.

Also, your compensation plan must be one that celebrates each sale done by your distributor. It’s critical that your team stay inspired so as to be able to create a strong downline which will keep the product moving in the market, keeping the entire team in the game. So, as you can see, your product is one of the most important things to consider before coming up with the compensation plan.

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